CMN 1148 Lecture Notes - Lecture 10: Decision-Making, Delphi Method, Bounded Rationality

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10 - Decision-Making Processes
Points to remember
Centralized (someone in the center making decision for
everything/everyone) Vs. Decentralization decision making (involving
others in decision making)
Well structured (where you know what is happening and you know your
goals and how you get there) Vs. 111 structured problems (people
would have no idea what they want, how to get there. it takes more time
and more careful analysis before dealing with the problem)
Perfect (perfectly rational, well informed) Vs. Bounded rationality (using
invalid, not perfectly rational, using gut feeling..all experiential based)
A rational decision making model
There is always a rational and scientific way to solve a problem.
Look into anything, documents, etc. anything that will help you
understand the problem
Different alternatives available...evaluating pros and cons of each.
Decision making model:
Identify problem
Search for relevant information
Develop alterative solutions to the problem
Evaluate alternative solutions
Choose best solution
Implement chosen solution
Monitor and evaluate chosen solutions
Alternatives to Rational Models
Maximization or optimization - utilize or select an alternative..something
which is more positive. Consequence or result oriented strategy.
Anchoring effect - if we don't want to deal with that problem so then we
well see what our initial understanding is. What your impression is about
the issue. When people stick with their initial judgement. Often due to
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